ASX Set for Weak Opening Followed by Surging Energy Prices
Synopsis
The Australian share market is tracking toward a weak start to the week, with SPI futures indicating an opening drop of 38 points or 0.45% for the ASX 200. This expected decline follows a poor Friday finish on Wall Street, where the Nasdaq and S&P 500 both fell over 1%. While local energy giants Santos and Woodside could see gains due to Brent crude oil prices jumping to $109.26 a barrel, gold miners face a tough day after gold futures tumbled 2.6% on renewed inflation fears.
The Australian share market is set for a weak start this morning, following a steep fall on Wall Street on Friday. Higher local energy stocks may gain from rising oil prices, while the broader index to be capped by soft gold prices and rising inflation expectations.
Key Highlights
- SPI futures indicate the ASX 200 will lose 38 points or 0.45% at this morning’s open.
- US had a bad close on Friday, S&P 500 finished down 1.25% while the Nasdaq dropped 1.55%, which suggests that the start of today’s session may be weak
- Local energy firms Woodside and Santos might rally after Brent crude jumped US$3 to $109.26 a barrel.
- Gold futures dipped 2.6 per cent to US$4,561.90 an ounce to prepare local gold miners for a difficult session.
- The lower Friday breaks a streak of gains
ASX Starting Steep on Monday
Expect immediate pressure on the Australian market after a sharp retreat across major global indices in late trade last week. The SPI futures are suggesting that the ASX 200 will fall by 38 points today.
Such a downward performance is due to the market sell-off on Wall Street, where one of America’s key indexes, the Dow Jones, declined by 1.1%. Having put in a 1.30% loss over the last five sessions, the local index enters the week basically flat year to date.
Tariffs, Sanctions and Tehran’s New Toll Road
Local power producers are bright spots of the morning session as a dramatic weekend spike in oil markets across the globe offers some momentum for domestic crude centres. Brent crude was up 3.55% at $109.26 a barrel while WTI crude rose 4.2% to $105.42 as political leaders exchanged warnings over the closure of critical oil shipping lanes.
These elevated commodity prices are likely to entice demand from major Australian producers such as Santos and Woodside Energy Group. On the other hand, a steep 2.6% fall in gold futures to US$4,561.90 an ounce yesterday is going to put pressure on gold producers as they open highly fragmented for materials and mining stocks.
Economic realities and political pressures, expert opinion
Market analysts say this twin reality of skyrocketing fuel prices and declining gold valuations is raising wider fears about inflation in the economy. Higher oil prices boost regional energy producers, but raise fuel costs for transport and increase the odds of more interest rates rises.
FAQs
- How the ASX 200 is trading today
Weak open: ASX 200 to lose 38 points today
- What is causing oil prices to increase and support domestic energy stocks?
Rising prices is due to warnings of shipping blockades, lifting crude oil to USD109.26 a barrel.
- What caused gold shares to face a poor start?
Gold futures dropped 2.6% to $4,561.90 an ounce as fears about higher interest rates and the US dollar surged higher.
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